Part -I

Draft Report of the CommitteeOn Fee Structure

For Un-aided Schools

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Table of Contents:

Foreword..................................................................................................................3Chapter 1: Introduction ...........................................................................................6Chapter 2: Relevant Extracts of Judgments............................................................8Chapter 3: Deliberations of the Committee: ..........................................................13Chapter 4: Recommendations ..............................................................................20Appendix 1: Suggested Norms based on recommendations of Subgroup I ...........26Appendix 2: Illustrative list of Heads for expenses for admissible expenditure as per thesuggested norms ...................................................................................................31Appendix 3: Measures for transparency based on Subgroup II recommendations34Chapter 5: Dissent Note of Dr J Jain & Committee’s comments ............................37Chapter 6: Dissent Note of Dr A Kulkarni & Committee’s comments .....................45

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Foreword

Taking cognizance of complaints of commercialization of education and profiteering byschools unaided by Maharashtra State Government grants, the Education Department hasset up this Committee to suggest norms for fixing fees.

Nearly 90% schools in the State are either aided or are run by the Local Bodies. Most ofthe remaining schools are either affiliated to National Boards like CBSE, ICSE orinternational Boards like IB, IGCSE. Excellence in learning is the key objective for the un-aided private schools. Therefore, each management as per its vision develops itscurricular and co-curricular activities for the holistic development of the student. In amajority of the schools, the fee structure is geared to this objective. However, there are afew black sheep which resort to profiteering and bring a bad name to all.

In this background, members of the Committee have recommended a broad framework ofnorms for determining the fees of the unaided schools. These norms recognize and allowfor the differences in requirements of institutions based on the curriculum of the Board thatthey are affiliated to ie State, National and International and their own ideas of activitiesnecessary for quality fulfillment of the requirement of such curricula. They recognize theinstitution’s right to select curricular and extra-curricular activities. The deliberations of theCommittee were guided by legislation and Supreme Court judgments governing fees ofunaided schools. The suggested norms intend to support unaided educational institutionsto continue to achieve excellence in providing education.

The Committee was unanimous that schools cannot be allowed to profiteer. However, aReasonable Surplus of up to 15% of total revenues could be generated by schools for theachieving their educational goals. Surplus was defined as the difference between the totalrevenues of an institution and the total admissible expenses. Total revenues includedfees and other income, if any. Admissible expenses were defined as those that contributeto imparting quality education to the students. Anything beyond such Reasonable Surpluswould, in the opinion of the Committee amount to profiteering.

To ensure that such schools do not resort to profiteering or commercialization ofeducation, the Committee has emphasized transparency in fixing the fees by the un-aidedschools and recommended a mechanism for achieving this along with a time schedule.

The Committee recommends that institutions project expenses and other income for theensuing academic year. This should form the basis of arriving at the proposed fees for thefollowing year. The computation should be shared in advance with the Executive Councilof the Parent Teachers Association (PTA). In case, a majority in the Executive Council ofthe PTA find that the proposed fee amounts to profiteering, it could approach the StateStatutory Committee with facts for redress.

It needs to be emphasized that 90% of the schools in the State fall in the ‘aided’ category.The condition of these schools is worsening day by day since the State Govt. has beenirregular in the timely disbursement of their non-salary grants and scholarships to theSC/ST children. The bulk of students in the State are, therefore being deprived of qualityeducation. There is an imperative need for the State Govt. to ensure timely release of thegrants for non-salary expenditure to enable such schools to give quality education.

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Numerous instances of non-receipt of grants/scholarships since 2004 were cited by theanguished members.

There was enthusiastic participation by members, who have wide experience in the field ofeducation. The members recognized the desire of parents from all walks of life to providequality education to their wards.

In such a broad-based Committee it is not possible for unanimity to emerge on all issues.However, the general sense of the house was gauged to arrive and record the Committeeviews on different subjects. The Report is presented in 3 parts: the First containing therecommendations of the Committee, the Second containing the Minutes of the meetings ofthe Committee and Reports of the two Sub-groups set up by the Committee and the Thirdcomprising miscellaneous representations received by the Committee.

Dr J Jain and Dr A Kulkarni have dissented. Their views have been incorporated inChapters 5 and 6, along with the comments of the Committee on the points raised.

The Committee takes this opportunity to thank all the participants for their valuablecontributions, Shri Bhalchander Desle, the Member Secretary of the Committee, ShriNarendra Kawde, State Project Director MPSP, Dr. RP Joshi and Dr Vidya Yerwadekar,the conveners of the Subgroups, Ms Farzana Dohadwalla, Shri Mohan Awate and ShriRajan Phansalkar for their help in drafting , Shri Phadke CA and the Secretarial staff fortheir whole hearted cooperation.

Mumbai, October 2009

Chairperson, Dr Kumud Bansal,

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List of Members of Fee Structure Committee

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Chapter 1: Introduction

1. The education system of modern Maharashtra is built on a strong progressivelegacy of the past. This is reflected in patterns of participation of girls and womenin education, as well as rising educational attainments among the traditionallydisadvantaged groups. Education was the focus of activity for social reformers andpolitical leaders in the state in pre-independent India. To start with, as early as1917, the princely state of Kolhapur institutionalized many changes motivated byreform thought and strategy; education not only became free, but measures weredesigned to encourage parents in rural areas to send their children to school.However, with the increasing dependence on State support since 1960, and thecommencement of Zilla Parishads, private initiative declined considerably at theelementary level. Again, from the late seventies, buttressed by political leadership’slocal initiative, the State witnessed a growing involvement of private andcommercial interests at all levels of education. This has led to an impressive growthof educational institutions in Maharashtra, at different levels. The number ofPrimary schools doubled in 30 years and the number of secondary schools grew 5times. At the elementary education level in the State, out of 67,885 schools (DISE-2005), the Zilla Parishads and Municipal Councils / Corporations run more than 90percent schools where no fees are charged. In this sector participation of privatemanagements is less than 10 percent.

2. In the Secondary Education sector, the State runs 424 Zilla Parishad Schoolsmostly in Vidarbha and Marathwada regions. Of the total 16,264 private SecondarySchools, 13,055 are aided and 3,209 are un-aided schools (Statistics of EducationDepartment, DISE 2008-09). The contribution made by private sector (socialorganizations) in secondary education has been outstanding with regards toexpansion, growth and quality education.

3. While the majority of schools are affiliated to the Maharashtra State Board, thereare others especially in the Metropolitan areas which are affiliated to CBSE, ICSE,IB and IGCSE. These Boards have different curricula. The unaided private schoolsaffiliated to these Boards provide a wide range of curricular and extra - curricularactivities, physical facilities and professional up-gradation of their teachers andstaff. There is a wide disparity in the fees among such schools, which has sometimes drawn sharp reactions from parents and public. There is, nevertheless ageneral perception among parents and students that the quality of teaching in theseschools is better, hence the demand for admission in these schools keeps growing. At the same time, not all the private un-aided schools, have excellence of standardsthough their fees are high.

4. Through the G.R dated 11th June, 2009 the State Govt. has asked this Committeeto evolve norms so that fees could be determined by the schools in accordance withsuch norms. Taking cognizance of complaints of commercialization of educationand profiteering, Government has undertaken this exercise. There are numerousjudgments of the High Court and the Supreme Court on establishment andmanagement of private un-aided schools that have had an important bearing on the

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Committee’s deliberations.

5. Setting up of Committee and terms of references

a. Taking into account the decision of Hon’ble Supreme Court of India in TMAPai Foundation vs state of Karnataka, the Maharashtra Government hadissued instructions to all unaided / permanently unaided primary / secondaryand Higher Secondary schools vide G. R. dt. 27th May, 2003, regardingadmission, fee structure, and concessions to unaided institutions inMaharashtra. In 2009, the Hon’ble High Court Mumbai in Writ Petition No.4503/2009 in case of Students Welfare Association Vs MaharashtraGovernment issued an Interim Order to the State Government to form aCommittee to decide norms for tuition fees and other fees, and directed theState to issue instruction to all concerned that during the pendency of thispetition no school should be permitted to increase fees.

b. Following the Interim order of The Hon’ble High Court Governmentappointed a Committee under Dr. Kumud Bansal, (IAS) Retd Secretary,Government of India, vide GR dated Misc.2009/(108/09)Mashi 3 dated 11thJune 2009. The Committee has been asked to study and consider thedecision in TMA Pai Foundation case and other decisions of Hon’bleSupreme Court and recommend to the State Government the procedure tobe followed by the unaided institutions to decide the fee structure

c. The Government Resolution states that this Committee shall considerPrimary / Secondary / Higher secondary unaided schools implementing stateboard syllabus, CBSE, ICSE, IGCSE (CIE) and IB curriculum. TheCommittee was further asked to recommend norms for deciding fee structurein unaided institutions based on various judgments of Hon. Supreme Courtand principles laid down in the judgments.

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Chapter 2: Relevant Extracts of Judgments

6. We begin by citing some excerpts of Judgments of Hon. Supreme Court of Indiabelow

a. T. M. A. Pai Foundation V/s. State of Karnataka (2002 ) 8 SCC : This is thesingle most important judgment since it comprised of the largest Bench of 11Supreme Court judges.

i. “A combination of unprecedented demand for access to highereducation and the inability or unwillingness of the Government toprovide the necessary support has brought private higher education tothe forefront. Also governmental domination of the educationalprocess must be resisted”.

ii. “In case of unaided private schools, maximum autonomy has to bewith the management with regard to administration, including the rightof appointment, disciplinary powers, admission of students and thefees to be charged. It is in the interest of the general public that moregood quality schools are established, autonomy and non-regulation ofthe school administration in the right of appointment, admission of thestudents and the fee to be charged will ensure that.”

iii. “There can be no doubt that in seeking affiliation or recognition, theBoard or the university or the affiliating or recognizing authority canlay down conditions consistent with the requirement to ensure theexcellence of education. But the essence of a private educationalinstitution is the autonomy that the institution must have in itsmanagement and administration. There necessarily has to be adifference in the administration of private unaided institutions and thegovernment-aided institutions. Whereas in the latter case, theGovernment will have greater say in the administration, includingadmissions and fixing of fees, in the case of private unaidedinstitutions, maximum autonomy in the day-to-day administration hasto be with the private unaided institutions.” (Para 55)

iv. “Bureaucratic or governmental interference in the administration ofsuch an institution will undermine its independence. While aneducational institution is not a business, in order to examine thedegree of independence that can be given to a recognizededucational institution, like any private entity that does not seek aid orassistance from the Government and that exists by virtue of the fundsgenerated by it, including its loans or borrowings, it is important tonote that the essential ingredients of the management of the privateinstitution include the recruiting students and staff and the quantum offee that is to be charged.”

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v. “The right to establish and administer broadly comprises the followingrights:

1. to admit students;

2. to set up a reasonable fee structure;”

vi. “One cannot lose sight of the fact that providing good amenities to thestudents in the form competent teaching faculty and otherinfrastructure costs money. It has, therefore, to be left to theinstitution, if it chooses not to seek any aid from the Government, todetermine the scale of fee that it can charge from thestudents”(para56)

vii. “the Government can provide regulations that will ensure excellencein education, while forbidding the charging of capitation fee andprofiteering by the institution……there can, however, be a reasonablerevenue surplus, which may be generated by the educationalinstitution for the purpose of development of education and expansionof the institution” (para 57)

viii. Distinguishing the Professional Colleges from the ones under theambit of this Committee, it was observed that

1. “For admission into any professional institution, merit must playan important role. While it may not be normally possible tojudge the merit of an applicant who seeks admission into aschool…” (para 58)

2. “Education is taught at different levels, from primary toprofessional. It is therefore, obvious that governmentregulations for all levels or types of educational institutionscannot be identical; (para 60)

3. “In case of unaided private schools maximum autonomy has tobe with the management with regards to administration,including the right of appointment, disciplinary powers,admission of students and the fees to charged.”(para 61)

ix. “It is no secret that the examination results at all levels of unaidedprivate schools, notwithstanding the stringent regulations of thegovernmental authorities are far superior to the results of thegovernment maintained schools. There is no compulsion on studentsto attend private schools. The rush for admission is occasioned by thestandards maintained in such schools and recognition of the fact thatState run schools do not provide the same standards of education.The State says it has no funds to establish institutions at the samelevel of excellence as private schools. But by curtailing the income ofsuch private schools, it disables those schools from affording the bestfacilities because of lack of funds.”

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b. Hon Supreme Court in Islamic Academy of Education V/s. State ofKarnataka (2003) 6 SCC

i. “So far as the first question is concerned, in our view the majorityjudgment is very clear. There can be no fixing of a rigid fee structureby the Government. Each institute must have the freedom to fix itsown fee structure taking into consideration the need to generate fundsto run the institution and to provide facilities necessary for the benefitof the students. They must also be able to generate surplus whichmust be used for the betterment and growth of that educationalinstitution……..” (emphasis supplied)

ii. “It is beyond any doubt that in the matter of determination of the feestructure the unaided institutions exercise a greater autonomy. They,like any other citizen carrying on an occupation, must be held to beentitled to a Reasonable Surplus for development of education andexpansion of the institution.”

c. Modern School V/s. Union of India (2004) 6 SCC

i. Regulation of quantum of fees: “In the matter of determination of thefee structure unaided educational institutions exercise a greatautonomy as they, like any other citizen carrying on an occupation,are entitled to a Reasonable Surplus for development of educationand expansion of the institution. Such institutions, it has been held,have to plan their investment and expenditure so as to generate profit.What is, however, prohibited is commercialization of education.Hence, a balance has to be struck between autonomy of suchinstitutions and measures to be taken to prevent commercialization ofeducation. However, in none of the earlier cases has the SupremeCourt defined the concept of Reasonable Surplus, profit, income andyield, which are the terms used in the various provisions of the Act.Therefore, what constitutes Reasonable Surplus in the context of theprovisions of the Act is the issue to be determined.”(para 14 and 15)

ii. “It is trite that economic forces have a role to play in the matter of feefixation. The institutions should be permitted to make reasonableprofits after providing for investment and expenditure. However,capitation fee and profiteering were held to be forbidden. Subject tothe above two prohibitory parameters fees to be charged by theunaided educational institutions cannot be regulated. There could beno rigid fee structure, after taking into account the need to generatefunds to run the institution and to provide facilities necessary for thebenefit of the students. They must be able to generate surplus whichmust be used for betterment and growth of that educationalinstitution.”

iii. “The fee structure must be fixed keeping in mind the infrastructureand facilities available, investment made, salaries paid to teachers

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and staff, future plans for expansion and/or betterment of institutionsubject to two restrictions, namely, non-profiteering and non-chargingof capitation fees. Surplus/profit can be generated but they shall beused for the benefit of that educational institution and cannot be usedfor personal gain or for other business or enterprise.”(para 15 and 16)

iv. There can be no fixing of a rigid fee structure by the Government.Each institute must have the freedom to fix its own fee structure takinginto consideration the need to generate funds to run the institution andto provide facilities necessary for the benefit of the students. Theymust also be able to generate surplus which must be used for thebetterment and growth of that educational institution.” (para 44 )

v. “In our view, on account of increased cost due to inflation, themanagement is entitled to create a Development Fund Account. Forcreating such development fund, the management is required tocollect development fees. In the present case, pursuant to therecommendation of the Duggal Committee, development fees couldbe levied at at a rate not exceeding 10% to 15% of total annual tuitionfee….” (para25)

d. The Seven Judge bench of the Hon. Supreme Court in P. A. Inamdar v/s.State of Maharashtra (2005) 6 CC had observed as follows:

i. “…..Even if we are inclined to disagree with any of the findingsamounting to declaration of the law by the majority in Pai Foundation,we cannot; that being a pronouncement by an 11 judge bench, we arebound by it.” (Para 20)

ii. “Pai Foundation explained in Islamic Academy:

1. whether the educational institutions are entitled to fix their ownfee structure

2. whether minority and non-minority educational institutionsstand on the same footing and have the same rights

3. whether private unaided professional colleges are entitled to fillin their seats, to the extent of 100%, and if not, to what extent;and

4. whether private unaided professional colleges are entitled toadmit students by evolving their own method of admission.

iii. “S.B.Sinha, J., defined what is "capitation" and "profiteering" and alsosaid that Reasonable Surplus should ordinarily vary from 6 percent to15 percent for utilization in expansion of the system and developmentof education.

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iv. “In Pai Foundation it has been very clearly held at several places thatunaided professional institutions should be given greater autonomy indetermination of admission procedure and fee structure. Stateregulation should be minimal and only with a view to maintain fairnessand transparency in admission procedure and to check exploitation ofthe students by charging exorbitant money or capitation fees.” (Para129)

e. In the Action Committee, Unaided Private Schools and Others V/s. Directorof Education, Delhi & Others (7th August 2009) the majority held:

i. “The 1973 Act and Rules framed there under cannot come in the wayof the management to establish more schools. So long as there is areasonable fee structure in existence and so long as there is transferof funds from one institution to the other under the same managementthere cannot be any objection.”

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Chapter 3: Deliberations of the Committee:

7. The Committee held 7 meetings between the 26th June and 10th October 09. Therecord of detailed discussions is annexed in Part 2 of the Report. There wasenthusiastic and meaningful participation by members, who had wide experience inthe field of education. The members recognized the desire of parents from all walksof life to provide quality education to their wards. It is widely accepted that progressin this century will be driven by knowledge. India has seen a consistently high rateof economic growth in the recent years. An educated and skilled manpower can notonly enhance our country’s progress but can enable the youth to meaningfullyparticipate in the opportunities due to globalization. The emergence of globaleconomy on account of improved communication and mobility of people has forcednations to review their systems of education and adjust to the changed globalrealities. Rather than continuing with conservative inward looking policies, severalcountries are reshaping their systems of education to make them globallycompetitive. There is a growing demand for quality education from students andparents. It is no longer simply a case of attending a school but passing out from areputed institution that assures a better placement for higher studies either in Indiaor abroad. Parents are willing to use their resources to invest in children’seducation. It was also recognized that an increasing role of private sector ineducation in the State has also been spurred by the absence of sufficient State runsecondary schools. The condition of the aided schools inspired little confidenceamong parents for quality education to their wards. There is, therefore, a consistentdemand from the parents to get admission in the private unaided schools as it isgenerally perceived that they provide better quality education. The Supreme Courtjudgement in TMA Pai case has aptly described the situation as “It is no secret thatthe examination results at all levels of unaided private schools, notwithstanding thestringent regulations of the governmental authorities are far superior to the resultsof the government maintained schools. There is no compulsion on students toattend private schools. The rush for admission is occasioned by the standardsmaintained in such schools, and recognition of the fact that State run schools do notprovide the same standards of education. The State says it has no funds toestablish institutions at the same level of excellence as private schools. But bycurtailing the income of such private schools, it disables those schools fromaffording the best facilities because of lack of funds.”

8. The views of the members of the Committee regarding controlling the fees in theseunaided schools ranged from a very stringent prescription for fees to total laissezfaire.

9. On the one hand it was argued that the only way to stop profiteering by unaidedprivate institutions was to have stringent and detailed norms for admissibleexpenditure and uniformity with the SS Code. There should be uniformity ofcompulsory curricular and extra curricular activities across all Boards. This wouldlend a degree of uniformity in fees too. Excessive variety in activities, facilitiesbecomes a convenient cover for commercialization. Each item of expenditureshould be open to PTA scrutiny and the Management should explain and beanswerable for each item of the Balance sheet or Profit and Loss Account. An ApexCommittee at the State level should fix fees for each school. Change in fee shouldbe once in three years and parents should be taken into confidence. Students

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should not be burdened with any capital expense. No separate funds forrenovation should be allowed. The fees should be fixed as per the Anti-CapitationFee legislation.

10. On the other hand it was argued that not only different Boards should be allowed tohave their own characteristic variations to provide richness of curricular and non-curricular activity but do all that they deem fit to add to the quality of education.Schools should be left to decide their fees and there should be minimalGovernment interference. After all, there was no compulsion for the parents to sendtheir children to a given school. Supreme Court’s judgment in Technical University’scase was also cited to state that the managements do not have to share theiraccounts with the PTA as they have to share with the Charted Accountant.

11. In such a broad-based Committee it is not possible for complete unanimity toemerge on all issues. However, the general sense of the house was gauged toarrive and record the Committee views on different subjects. For example:

a. A point had been made that a common limit of Rs 15,000 should berecommended for fees across the board for all unaided schools. TheCommittee had discussed this and found it unacceptable in view of the TMAPai judgment that private unaided schools had the right to fix their fees. Ithas ruled that maximum autonomy has to be with the management of theunaided schools with regard to administration, admission of students and thefees to be charged. It has also ruled that providing good amenities to thestudents in the form of competent teaching faculty and other infrastructurecosts money. If the school chooses not to take any aid from the government,it is left to the school to determine the scale of fee it can charge from thestudents.

b. There was a suggestion that since the Capitation Fee Act already listeditems for which private unaided schools could charge fees, that list should beadopted for admissible revenues without any change. However, the TMAPai judgment requires that “by virtue of this judgment the fee structure fixedunder any regulation or enactments will have to be reworked ....” TheCommittee therefore, recommends that the Capitation Fee Act of the StateGovernment be amended to bring it in line with the Supreme Court judgment.The same correction would also be needed for the SSC Code and otherGRs.

c. A suggestion was made that all Boards should have an identical minimumbasic syllabus and compulsory activities and the rest should not be a part ofthe school hours. This had been discussed and found unacceptable becauseeach Board had its own unique character and such rigid uniformity ofcurriculum or activities was not desirable

d. Some institutions profiteer by charging excessive fee or inflating expenses.For example, some schools may manipulate building funds, donations,security deposits, sale of admission forms, unduly high admission/term /processing fees etc. The Committee noted that such aberrations andmalpractices can be addressed adequately by its recommendations

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12. After detailed discussions, keeping the interest of the students in mind theCommittee came to the following conclusions:

a. Excellence in learning is the key objective for the un-aided private schools.Therefore, each management as per its vision develops its curricular and co-curricular activities for the holistic development of the student. In a majorityof the schools, the fee structure is geared to this objective. However, thereare some unscrupulous institutions which resorted to profiteering andbrought a bad name to all.

b. Since there are multiple Boards and their course contents, teaching-learningmethodologies, infrastructural needs and staff facilities differ significantly,there is no reason to force a rigid uniformity of curriculum or activities acrossthe board. Similarly within a Board, curriculum and activities will differ fromthe primary to high school level.

c. In this background, members of the Committee decided to develop anillustrative list of activities both curricular and co-curricular as well as headsof admissible expenses which could be necessary for all unaided schools.These are at the end of this Report. In addition, other activities and items ofexpenditure could also be incorporated in the fees by individual institutiondepending on its own idea of quality education and specific requirements ofits National and International Board.

d. It was recognized that the approach of the Committee needs to be consistentwith the Supreme Court pronouncements. The TMA Pai Foundationjudgment specifically states that capitation fee and profiteering is notallowed. On capitation fee there is already a State legislation. However, thatAct must be amended to bring it in line with the Hon Supreme Courts’judgment. The Government Resolution of May 2003 is not sufficient toenforce the TMA Pai judgment.

e. What is profiteering is still to be clearly defined. It was the endeavor of thisCommittee, to define this. The Committee decided that as a broad principle,the norm or legitimacy of an item of admissible expenditure will be whether itpromotes quality education to students. All norms/ items of admissibleexpenditure must relate to promoting

i. Teaching -learning process

ii. Student welfare and

iii. Good administration of the institution.

f. With the help of these over-riding norms, it was considered desirable to firstlist the heads of admissible costs. Revenue and capital items had to beseparated. Provisions for current and future need of the institution were alsoincorporated. ‘Reasonable Surplus’ had to be defined and agreed upon.Any surplus, over and above a ‘Reasonable Surplus’, would then amount to‘profiteering’. A Sub-group was set up to develop these norms.

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g. At the same time when parents admitted their children in unaided schoolsand agreed to pay for quality education, there must be reasonable assurancethat they were not being fleeced through commercial manipulation. Therewas a need to put some mechanism in place to ensure that there was noprofiteering through fees. Another Sub-group was, therefore, constituted tosuggest measures for the same.

h. The Sub-group I on norms comprised of the following:

i. Dr. Vidya Yerwadekar - Convener

ii. Smt. Aradhana Somani - Member

iii. Smt. Farzana Dohadwalla - Member

iv. Shri Ramesh Panse - Member

i. Sub-group – II on transparency comprised

i. Dr. R.P. Joshi - Convener

ii. Dr. K.B. Kushal - Member

iii. Shri Jayat Jain - Member

iv. Shri K.V. Tare - Member

v. Shri P.M. Raut - Member

vi. Shri Gregory Lobo - Member

vii. Shri Pavan Poddar - Member

viii. Smt. Arundhati Chavan - Member

ix. Dr. Avisha Kulkarni - Member

j. The Sub-groups were free to invite experts to help them in this exercise.Each Sub-group is requested to associate their Cost and Finance experts, todevelop such definition of ‘profiteering’ based on cost norms they considerlegitimate. Reports of the two Sub-groups are in Part II of the Report.

k. It was noted that 90% of the schools fall in the aided category. The conditionof these schools was far from satisfactory since the State Govt. was mostirregular in the timely disbursement of their non-salary grants andscholarships to the Scheduled Castes and Scheduled Tribe children. Thebulk of students in the State are, therefore deprived of quality education.There is an imperative need for the State Govt. to ensure timely release ofthe grants for non-salary expenditure to enable such schools to give qualityeducation. Numerous instances of non-receipt of grants/scholarships since

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2004 were cited by the anguished members. This was borne out also by therepresentative of the State Government.

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l. The University Grants Commission and the Ministry of HRD, Govt. of Indiahas been keen that Higher Educational Institutes, colleges or universitiesget accreditation from NAAC. On the same lines, schools in which the basicfoundation for child development is laid should also be accredited. This willbring transparency and help parents in benchmarking schools. It willgenerate a healthy competition among schools for better ratings fromaccreditation agencies. Once the desired level of quality is achieved throughaccreditation, the parents will also not mind paying higher fees for the sakeof quality. In other words, if a measure of autonomy is given to schools infixing their fees, it should also be accompanied with accountability ofmaintaining certain norms and standards for imparting Quality education inschools. To ensure that prescribed norms and standards are followed tomaintain quality, the Committee recommends accreditation and rating of allschools through an independent accrediting organisation eg the QualityCouncil of India.

m. In the Third meeting of the Committee, Mr B.D. Desle, member Secretarymentioned that the Hon. Education Minister, has desired that this Committeeshould also examine the fee fixation for Pre-primary Schools. Herecommended inclusion of the following members on the Committee for thepurpose :-

i. Smt. Patankar, Balmohan Vidya Mandir, Dadar.

ii. Shri Kamlakar Deshpande, Director.

iii. Shri Marathe, Treasurer, Social Work.

iv. Shri Hussain, Subject Expert.

n. These experts were invited to the meetings from 18th July. All of them saidthat Pre-Primary education is essential for ensuring universalisation ofprimary education. They stressed the need of quality Education in the sector.The Committee noted that over 90% of the Pre - primary education in theState is through Anganwadis of ICDS and Balwadis of the EducationDepartment. It is also the policy of the State to close Balwadis whereverAnganwadis open. There is a small percentage of unaided Pre-Primarycentres, mostly in urban areas. Some of them are opened by unaidedPrivate schools as a part of their schools and some are run independently.The Education Policy at the National level has recognized that ECCE iscrucial for the success of primary education.

o. In the discussion that followed, the following points were made to defer theconsideration of Pre-Primary category:

i. This Committee should not take additional responsibility of Pre-Primary education as it is not compulsory.

ii. The fee structure, student- teacher ratio, teaching methodology isdifferent for Pre-Primary section. Therefore, 1st and 2nd Standards ofPrimary should not be attached to the Pre- Primary section.

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iii. The Committee’s attention was drawn to the fact that at present,grievances of parents are not duly redressed by the Governmentfunctionaries. If the Govt. is unable to fulfill even its present obligationthere was no reason to add more to its responsibility.

iv. The non-salary grant which is in arrears from 2005 to the aidedschools should first be given. Further, timely future disbursementshould be ensured.

v. Experts deciding the curriculum and text books for the SSC are allfrom Universities. They decide an unrealistically heavy curriculum.There is little involvement of pre Primary school teachers who have toshoulder the burden.

p. For the reasons explained by the members in the discussions, it was felt thatthe issues pertaining to Pre-Primary education can be taken up separatelyonly after the conclusion of the current exercise.

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Chapter 4: Recommendations

13. The Committee came to the conclusion that education is an important input both forthe growth and development of the individual and the society. It accelerates theprogress of the country in every sphere of life. The terms “knowledge society” hasnow become a familiar expression in education policy - discussions communicatingthe emerging global trends with far reaching implications for growth anddevelopment of our country. The shift of power from physical power to mind powerindicates the changing foundation of the economy. One is reminded of FrancisBacon who said “knowledge is power” and Winston Churchill who said “the empiresof the future shall be empires of mind”. It, therefore, becomes the duty of the Stateto ensure that quality education is provided to all its youth for the equitabledevelopment of society. The National Policy on Education (NPE) 1986 states thatthe Government and the community will find funds for such programmes as: theuniversalisation of elementary education, liquidating illiteracy, equality of access toeducational opportunities to all sections throughout the country, quality andfunctional effectiveness of educational programmes…”. However, even after twodecades of the National Policy through State’s resources and the Sarv SikshaAbhiyan, we have still not achieved universalisation of elementary education anduniversalisation of secondary education is a distant dream. Even the performanceof the State in giving regular grants to the aided schools in Maharashtra isextremely unsatisfactory thereby severely compromising quality of schooleducation. The State Board is the major Board providing education through 90%schools in Maharashtra. Out of 19,190 Secondary schools in Maharashtra, lessthan 500 are affiliated to National / international Boards. These offer choices to theparents and students who would like to study further at the National Institutes orinternational Universities abroad. Surely, we would do enormous injustice to suchstudents by either controlling or restricting the autonomy of such unaided schools orcontrolling their syllabus. We would do well to remember the advice of NobelLaureate Amartya Sen in his Lal Bhadur Shastri Memorial lecture on 10-11 March1970 on “the Crisis in Indian Education”, where he emphasized that “due to thegovernment’s tendency to formulate educational policies based on public pressure,often wrong policies are pursued.” Government should be wary of imposingdisabling restrictions on the unaided schools, but allow them to follow theirrespective Boards’ curriculum, fixing of fees at their discretion without profiteering,to ensure quality education to the students choosing to study in such schools. Itwould be unrealistic and detrimental to the development of students to discourageprivate sector initiative in providing quality education and diversity of curriculum inNational and International Boards.

14. In respect of fees the TMA Pai judgment unequivocally states that the privateschool managements of unaided institutions have the right to decide their fees. Ithas ruled that maximum autonomy has to be with the management of the unaidedschools with regard to administration, admission of students and the fees to becharged. It states:

a. “The right to establish and administer broadly comprises the following rights:(a) to admit students;(b) to set up a reasonable fee structure;……..

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b. One cannot lose sight of the fact that providing good amenities to thestudents in the form competent teaching faculty and other infrastructurecosts money. It has, therefore, to be left to the institution, if it chooses not toseek any aid from the Government, to determine the scale of fee that it cancharge from the students”

The Committee, therefore, recommends that private unaided schools shouldhave the autonomy to fix the school fees.

15. The TMA Pai judgment permits institutions to make a reasonable surplus however,it disallows charging of capitation fee or profiteering:

a. “the Government can provide regulations that will ensure excellence ineducation, while forbidding the charging of capitation fee and profiteering bythe institution……there can ,however, be a reasonable revenue surplus,which may be generated by the educational institution for the purpose ofdevelopment of education and expansion of the institution”

16. Further, the Hon Supreme Court in Islamic Academy of Education V/s. State ofKarnataka (2003) 6 SCC observes

a. “They (unaided institutions), like any other citizen carrying on an occupation,must be held to be entitled to a Reasonable Surplus for development ofeducation and expansion of the institution.”

17. In addition, Para 16 of the Inamdar case judgment notes that fees may cover

a. ‘future plans for expansion and betterment of the Institution.’

b. It further says that the Reasonable Surplus should cater to ‘expansion of thesystem and development of Education’ and provides a range of 6 to 15 %.’

18. The Committee accordingly recommends that ‘Reasonable Surplus’ should beallowed up to 15% of the total revenue. Surplus will be as the difference betweenthe total revenues of an institution and the total admissible expenses.

Total revenues will include all fees and other income such as interest of fixeddeposits, dividends on investments etc, if any.

Admissible expenses are those that contribute to imparting quality education to thestudents. An illustrative list of admissible expenses has been drawn by thecommittee. A surplus, over and above, such ‘Reasonable Surplus’ would, in theopinion of the Committee, amount to profiteering.

Requirement of funds for the future expansion of the institution and development ofeducation will be sourced from ‘Reasonable Surplus’.

19. With regard to revenue, the Committee recommends the unaided private schoolscontinue to have the autonomy to determine the fees to be charged taking in toconsideration the need to generate funds to run the institution and to provide

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facilities necessary for the students. However, schools are proscribed fromcharging capitation fee and should not be allowed to profiteer.

20. Management of the institution and parents of the students may also requireadditional facilities which may not be common for all the students and thereforemay be recovered from a select group of students only. All such fees will also formpart of total revenue.

21. With regard to admissible expense, the test of legitimacy of an item of admissibleexpenditure will be whether it promotes imparting quality education to students interms of:

a. Teaching –learning processes,

b. Student welfare and

c. Good administration of the institution.

22. There cannot be uniform and rigid norms for deciding admissible expenditure asinstitutions are affiliated to different Boards and the norms prescribed by everyBoard are different. Also each institution may have a different vision of whatconstitutes quality education for its students. Cost of infrastructure and facilitiesvary from place to place (urban and rural). The expenses incurred also varyaccording to the stage of schooling (Primary, Secondary & Higher Secondary), staffrequired for implementation of curriculum and salary of such staff.

23. A list of heads of admissible expenditure has been drawn by the Committee andincluded in this report. This is at best illustrative. This includes items like repairs andmaintenance of assets, depreciation, the annual increments in salaries, increase inexpenses due to inflation, expenses on account of statutory requirements etc.

The funds for capital expenditure are invested by the Trust/Management of theSchool. When these assets are used for the purpose of education of students, it isnecessary to recover the depreciation of various assets and incur revenueexpenditure for maintaining such assets in good condition. The Committee’srecommendation is that the General Accepted Accounting Principles will apply to allsuch items. Their illustrative listing in Appendix does not vitiate such application ofaccounting principles.

24. The Tuition fees of students of backward class in unaided schools should bereimbursed to management in the same year. Here the fees decided bymanagement shall be considered to be the Tuition fees.

25. The Management should clearly articulate in advance its refund policy of the tuitionfee, if a student is withdrawn at the beginning or in the middle of the session.

26. TMA Pai judgment also disallows capitation fee. The State Capitation Fee Actaddresses capitation fee. Relating to this, Para 393 of the TMA Pai Judgmentstates “now by virtue of this judgment the fee structure fixed under any regulation orenactments will have to be reworked ....” The Committee therefore, recommendsthat the Capitation Fee Act of the State Government be amended to bring it in linewith the Supreme Court judgment.

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27. It is in the interest of the general public that more good quality schools areestablished. The management of unaided private schools should have also themaximum autonomy in administration, including the right of appointment,disciplinary powers and admission of students.

28. The University Grants Commission and the Ministry of HRD, Govt. of India hasbeen keen that Higher Educational Institutes, colleges or universities getaccreditation from NAAC. On the same lines, schools in which the basic foundationfor child development is laid should also be accredited. This will bring transparencyand help parents in benchmarking schools. It will generate a healthy competitionamong schools for better ratings from accreditation agencies. Once the desiredlevel of quality is achieved through accreditation, the parents will also not mindpaying higher fees for the sake of quality. In other words, if a measure of autonomyis given to schools in fixing their fees, it should also be accompanied withaccountability of maintaining certain norms and standards for imparting Qualityeducation in schools. To ensure that prescribed norms and standards are followedto maintain quality, the Committee recommends accreditation and rating of allschools through an independent accrediting organisation eg the Quality Council ofIndia.

29. There should be a Grievance Cell to verify that the representatives of ParentTeacher Association are elected in a democratic manner as per the G.R. dated 18th

October 1997, 22nd July 1999, 22nd May 2000, 27th May 2003, etc. and or the HighCourt Order to make it more transparent. The constitution of this Grievance Cellshould be with 2 members from parents and 2 members from management.

30. No school / management should accept / demand capitation fees as per theMaharashtra Educational Institutions (Prohibition of Capitation Fee) Act, 1987.

31. As per the judgement of the Hon'ble Supreme Court (T. M. A. Pai Foundation V/s.State of Karnataka and other recent judgements), it is the right of the managementto decide the fee structure. However, the proposed fee should be discussed in theParent Teacher Association meeting.

32. To develop a better understanding between the parents and the management,following measures are recommended.

a) Regular meetings of Parent Teacher Association

b) Agenda of the meeting of Parent Teacher Association should be circulatedwell in advance to all the members of Parent Teacher Association.

c) Talent and resourcefulness of parents could be taken into consideration inimproving the learning capabilities of the students.

d) If feasible, suggestions from the parents can be invited without asking themto disclose their identity to enable the management to know the views of theparents.

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e) Parent Teacher Association should consider organizing a minimum of 3programmes in a year.

f) It is essential to have some programmes of orientation for representatives ofthe parents for better understanding.

g) These programmes should be conducted soon after the school sessionstarts.

33. To ensure fee charged by an unaided private institution does not result inprofiteering, a mechanism and time schedule to ensure transparency isrecommended below:

a. In terms of a mechanism, each unaided institution will create a projectedincome and expense statement for the forth-coming academic year. This willinclude all fees and other income, admissible expenses and the resultantsurplus.

The Management will furnish these projections in advance to the ExecutiveCouncil of the PTA along with the audited financial statements available ofthe latest academic year.

The Council would be expected to identify any element of profiteering in thedata furnished and communicate its suggestions for changes to theManagement. After considering the suggestions, the Management mayrevise the fee. It will then communicate its decision on the fee to the parentsand start charging the same.

If the majority in the Executive Council of PTA finds that the fee so notifiedresults in profiteering, it could approach the State Statutory Committee withfacts for redress. The Statutory Committee, may not stay the levy of theproposed fee, but after hearing both parties, determine the element ofprofiteering and order suitable reduction prospectively.

b. With regards to a time schedule, the Management will provide both thefinancial statements referred to above, to the Executive Council of the PTAthree to nine months prior to the end of the current academic year.

Within one month of receiving the statements, the Executive Council wouldbe expected to identify any element of profiteering in the data furnished andcommunicate its suggestions for a change in fee to the Management.

After receiving the Executive Council’s suggestions, if any, the Managementwill notify parents of the revised fee, within a month.

c. It is recommended that the State Statutory Committee may be headed by aretired Judge of Hon’ble High Court, one representative of unaidedinstitutions, one representative of parents, one representative form theNational Boards, one Chartered Accountant and the Secretary of the SchoolEducation Department or his representative.

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34. One issue that was repeatedly raised in the Committee was the delay indisbursement of non-salary grants and reimbursement of SC-ST scholarships bythe Government to the aided school. It was forcefully contended that this was mostpertinent to the issue at hand. It is to be noted that 90% of all schools in the Stateare aided schools. Their standards are continuously deteriorating because ofGovernment apathy and neglect in timely disbursement of grants. The non-salarygrants have not been disbursed to the aided schools since 2004. It was eveninsinuated that because Government cannot discharge its obligation to impartquality in 90% aided schools, it is trying to bring down the quality in the remaining10% unaided schools. The Committee feels that since it is not the intention ofGovernment to bring down the quality of education in un-aided schools through thepresent exercise, it should be ensured that the measures proposed are only toeliminate profiteering by a few black sheep among the unaided schools and not topenalize or to place unwarranted restrictions on others.

35. In the TMA Pai judgment this issue has been highlighted by the Hon’ble Court’sfollowing observations:

a. “It is no secret that the examination results at all levels of unaided privateschools, notwithstanding the stringent regulations of the governmentalauthorities are far superior to the results of the government maintainedschools. There is no compulsion on students to attend private schools. Therush for admission is occasioned by the standards maintained in suchschools, and recognition of the fact that State run schools do not provide thesame standards of education. The State says it has no funds to establishinstitutions at the same level of excellence as private schools. But bycurtailing the income of such private schools, it disables those schools fromaffording the best facilities because of lack of funds. If this lowering ofstandards from excellence to a level of mediocrity has to be avoided, theState has to provide the difference”

36. The Committee recommends that the Government should address this issue byclearing the backlog at the earliest and by making adequate budgetary provisions toensure timely release of grant in future, so that the bulk of the students studying inthe aided school receive quality education.

37. The Committee also recommends that Government may take a conscious policydecision and allow private aided schools to raise additional resources as per normsthrough the combined efforts of PTA and school management.

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Appendix 1: Suggested Norms based on recommendations ofSubgroup I

TEACHING – LEARNING PROCESS I. Curricular Activities

♦ Child-centred methodology

♦ Teaching aids

♦ Teachers to be facilitators

♦ Resources

♦ Software

♦ Online databases

II. Co-Curricular Activities

♦ A variety of activities for the Holistic Development of the student

Value Education

Civic Sense

Environmental Awareness

Life Skills

Adolescent Education (includes Aids awareness )

♦ Activities for fun ,skill development and enhanced learning eg

Sports

Dance

Drama

Music

Research

III. Faculty

♦ Qualifications

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The school should appoint HSC with D Ed teachers for Standard I toStandard IV and graduate with B Ed for Standard V to Standard X

♦ Incentives

♦ Salaries

♦ Perks

♦ Service Conditions

♦ Guest Speakers

♦ Personal Up gradation

Research

Training

Study Tours

IV. Environment

♦ Space 8 sq ft per child

♦ Cleanliness of the facilities

♦ Facilities (as per the requirements of the affiliating Board )

Library----resources for leisure reading, research and for professionaldevelopment

Labs

Computer centre

Classrooms

Office Spaces

Activity Rooms

Playground for outdoor games

Space for Indoor games

Infirmary

Counselor’s room

Store rooms

RestroomsHands-on learning experiences

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♦ Internet

♦ Inquiry cycle

♦ Field trips

♦ Community interactions

♦ Experts

♦ Resources

♦ Experiments

♦ Software

V. Remedial Teaching

VI. Student’s continuous evaluation and feedback

VII. Teacher-student ratio

A) STUDENT’S WELFARE

I. Safety

Safety Measures within the building – Balconies to be grilled.Open spaces to be covered and sharp edges to be avoided.Wiring to be covered,Fire Extinguishers to be graded ABC- ABC for normal fires, - D forChemical Evacuation Drill Report, Class room fire plan,Contingency evacuation plan file with drill timings. Disastermanagement should be looked into.

II. Healthcare and emergency medical help

Suitable health arrangement for primary check up and maintenance of records.basic first aid facilities, oxygen, doctor on call , visits by health consciousorganizations on a regular basis. Taking help of professionals if required toprovide good healthcare.

III. Nutrition

Nutritive snacks and meals to be served in the cafeteria and school shouldpromote healthy habits and avoid sale of junk food in the cafeteria

IV. Safe Drinking Water

Purified water in clean pots or coolers V. Sanitation

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The health and hygiene in the school is of prime importance as children aremore prone to all kinds of illness.To ensure this cleanliness of the school should be monitored.

VI. Career Counseling

To help students make decisions for their future careers, schools shouldappoint on a part time or as required basis a career counselor

VII. Stress Management

There should be workshops organized to help students acquire stressmanagement techniques and not be depressed.

VIII. Guidance and Counseling

A school should appoint as a visiting faculty a clinical Psychologist or similarperson to help the students who are in need of such expert help and guidance

B) Administrative

♦ School management software

♦ Furniture and fixtures

♦ Playground maintenance and rent if payable

♦ Buses for field trips

♦ SMS service

♦ Smart cards/ I cards

♦ Consumables

♦ Equipment s for labs

♦ Equipments for games

♦ Equipments and materials for art, music, drama

♦ Affiliation fees

♦ Newspapers and periodicals

♦ CCTVs

♦ Office Equipment

♦ Telephones

♦ Fax

♦ Stationery

♦ Computers

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♦ Printers

♦ Xerox machine

♦ Printing

♦ Banners and posters

♦ Events

♦ Special days

♦ Investiture

♦ Teacher’s day gifts

♦ Children day gifts

♦ Prizes

♦ Gifts for guests

♦ Legal fees

♦ Uniform for ayahs and peons

♦ Staff picnics and outings

♦ First aid materials

♦ Examination

♦ Courier and postage

♦ School publications

♦ AMC’s of various services and instruments

♦ Equipment hire for events

♦ Auditorium hire

♦ Taxes---property, municipal, water

♦ Electricity charges

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Appendix 2: Illustrative list of Heads for expenses for admissible expenditureas per the suggested norms

A ) Expenses for Teaching –Learning Process

Library resourcesNewspapers and periodicalsMembership charges of other libraries in the city/townTeacher training workshops –cost ,lodging ,boarding and travel plus incidentalsSeminarsInter school and Inter house progs/competitionsHosting MUN or other progsOutsourced agencies--- dance academy, trinity school, etcConsultantsAcademic Management expertsGuest speaker honorariumSalaries of teaching and non teaching staffPF and extra duty allowancesSpecialised coaches for various gamesLab equipmentsAudio-Visual equipmentsCdsLCDSHardware and softwaresOnline databasesSports equipment Teaching AidsCultural eventsNational festivalsSports field chargesSwimming Pool maintenance and charges if anyAuditorium hireBus hire for field tripsLights and Sound hireDepreciation, renovation, modification and refurbishment of premisesInternet chargesToysOutdoor play equipmentsIndoor play equpmentsAllied Teaching resources

B ) Expenses for Student’s Welfare

Fire extinguishersFire drillsDisaster mgmtThe school should be sensitive to arrange for special needs and thus provideadequate counseling facilities, which includes hiring qualified people

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Aqua GuardWater coolersLab safety equipmentsSalary of a school CounsellorHouse Keeping costsSoaps detergents materials for cleaningMachine for cleaningCharges paid to Career CounselorWorkshop charges for student workshops like stress ,teen toofane etcFirst Aid equipment/outsourced healthcare for students and staffCafeteria personnelCafeteria equipment and maintenanceSchool SecurityTo provide setting of canteen facilities such as tables, chairs

C ) Expenses for Administration

Recruitment of staffAccreditation costsBoard feesAnnual Municipal TaxesRentInterest on loans (for capital, etc )takenAnnual Property taxElectricity chargesAMC’s (lifts, equipment, Air conditioners, water coolers website upkeep etc)Water chargesWater tankers got for water shortage (whenever)Pest control chargesInfrastructure costs--maintenanceEquipmentsNon teaching ResourcesGardening tools and costsAnnual memberships charges for library/AssociationsLegal expensesCA expensesProgramsCostumes and stage backdropsUniforms for class 4 employeesStaff welfare activitiesGifts and prizesPrintingStationerySmart Cards/I cardsMachines (xerox ,lamination, spiral , fax,)TelephoneConsumablesDigital camerasDVD playersBlank CDSBlank DVDSPen drives

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Portable hard discsSoftwarePA systemsVideo conferencing equipmentCCTV camerasSecurity alarmsconveyance,sumptuary allowancesmeeting expensesfood and tea expenses for guestsTea-Coffee vending machine and consumablesPhotography and video shooting of eventsFurniture & Fixture requirement on an ongoing basis

D ) Depreciation on Fixed Assets (As per Income Tax Act)

BuildingFurniture & FixtureElectric Installation & FittingsWater CoolerAir ConditionersInstrument & EquipmentLaboratory InstrumentComputers, Laptops & PrintersAudio Visual EquipmentsToysGymnasium GoodsSewing MachineLiftBiometric MachineCopier MachineLibrary BooksMotor VehicleFranchise chargesBrand Royalty

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Appendix 3: Measures for transparency based on Subgroup IIrecommendations

I) Setting up of a Grievance Cell :

There should be a Grievance Cell to verify that the representatives of ParentTeacher Association are elected in a democratic manner as per the G.R. dated 18th

October 1997, 22nd July 1999, 22nd May 2000, 27th May 2003, etc. and or the HighCourt Order to make it more transparent. The constitution of this Grievance Cellshould be with 2 members from parents and 2 members from management.

II) Fixation of School Fees :

a) No school / management should accept / demand capitation fees as per theMaharashtra Educational Institutions (prohibition of capitation fee) Act, 1987.

b) As per the judgement of the Hon'ble Supreme Court (T. M. A. PaiFoundation V/s. State of Karnataka and other recent judgements), it is theright of the management to decide the fee structure. However, the proposedfee should be discussed in the Parent Teacher Association meeting.

c) Fees can be revised after every 3 years. They can also be revised everyyear if required (e.g. to implement Pay Commission recommendations,annual increment, etc.). The decision of revision of fees should be intimatedto the parents well in advance.

III) Better interaction between Parents and Management :

To develop a better understanding between the parents and themanagement, following measures can be taken.

a) Regular meetings of Parent Teacher Association should be conducted everymonth.

b) Agenda of the meeting of Parent Teacher Association should be circulatedwell in advance to all the members of Parent Teacher Association.

c) Talent and resourcefulness of parents could be taken into consideration inimproving the learning capabilities of the students.

d) If feasible, suggestions from the parents can be invited without asking themto disclose their identity to enable the management to know the views of theparents.

e) Parent Teacher Association should consider organizing a minimum of 3programmes in a year.

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IV) Orientation of Parent Teacher Association :

a) It is essential to have some programmes of orientation for representatives ofthe parents for better understanding.

b) These programmes should be conducted soon after the school sessionstarts.

V) Mechanism and time schedule to ensure transparency :

To ensure fee charged by an unaided private institution does not result inprofiteering, a mechanism and time schedule to ensure transparency isrecommended below:

a) Mechanism :

• In terms of a mechanism, each unaided institution will create aprojected income and expense statement for the forth-comingacademic year. This will include all fees and other income, admissibleexpenses and the resultant surplus.

• The Management will present these projections in advance to theExecutive Council of the PTA along with the audited financialstatements available of the latest academic year.

• The Council would be expected to identify any element of profiteeringin the data furnished and communicate its suggestions for changes tothe Management. After considering the suggestions, the Managementmay revise the fee. It will then communicate its decision on the fee tothe parents and start charging the same.

• If the majority in the Executive Council of PTA finds that the fee sonotified results in profiteering, it could approach the State StatutoryCommittee with facts for redress. The Statutory Committee, may notstay the levy of the proposed fee, but after hearing both parties,determine the element of profiteering and order suitable reductionprospectively.

b) Time schedule :

• With regards to a time schedule, the Management will provide boththe financial statements referred to above, to the Executive Council ofthe PTA three to six months prior to the end of the current academicyear.

• Within one month of receiving the statements, the Executive Councilwould be expected to identify any element of profiteering in the datafurnished and communicate its suggestions for a change in fee to theManagement.

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• After receiving the Executive Council’s suggestions, if any, the Management willnotify parents of the revised fee, within a month.

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Chapter 5: Dissent Note of Dr J Jain & Committee’s comments

S. No Gist of point made by Dr Jain Views of the Committee1 My (Dr Jain’s) notes to the

successive committee meetingsshould be published as dissentingnotes along with all my suggestions /recommendations in the final report.

Part 2 of the Report contains thefinal minutes of all meetings. Allwritten submissions receivedfrom members have beenincluded therein including DrJain’s dissenting notes.

2 I regret to state that draft report isnothing but a license to the schoolmanagement to increase / collectfees under various heads. Theproposed report will legalizeeverything and the parents/ studentswill be at the mercy of themanagement, who will exploit themlegally, if this report is implemented.Therefore I honestly request you toplease reconsider facts andrecommendations / suggestionsmade by the parents (myself) andredraft the final report.

On the contrary, the Reportrestricts the Management fromcharging arbitrary fee, by :

• Specifying a ceiling for‘reasonable surplus’

• Relating admissibleexpenditure to normsrelated to quality

• Prescribing a statutorymechanism for redress ofgrievances of PTArelating to profiteering.

• Prescribing a timeschedule for the purpose

3 Please note that the TMA Paijudgment was basically for MinorityInstitutions and it should not begeneralized. I also request you toconsider the latest Supreme CourtJudgment in the matter of ModernSchool, Delhi, which I have beenquoting in all our committeemeetings.

Both the judgments have beendiscussed and considered atlength in the Committeemeetings.

4 From the report it appears that thecommittee has been appointed toresolve issues pertaining to schoolmanagement and recommend theways and means to legalize feesunder various heads. The reportclearly indicates that the schools willbe authorized to increase / collect /charge any amount of fees byresorting to various means asrecommended under the head ofSuggestive Norms. The poor parents/ students will be subjected toexploitation by the management inthe name of quality education.

The allegation that Committee isrecommending “that the schoolswill be authorized to increase /collect / charge any amount offees” is baseless and biased. Aspointed out above, only‘Reasonable profit’ restricted to15% of revenue is beingrecommended. Further, thissurplus is to be used fordevelopment of education.

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5 The committee was formed to look into the issues pertaining to parentsgrievances, exorbitant fee hike andto suggest norms for fixing schoolfees but instead the main subjects ofcommittee’s discussion were QualityEducation, Reasonable Surplus,Autonomy to Schools etc. andultimately the same has beenachieved due to their majority andvarious other reasons.

The Government’s main aim /purpose to benefit parents by fixinga reasonable fee structure will bedefeated.

If no transparency can bemaintained in the said committee,how we expect the schools tomaintain transparency, profiteeringis their sole objective / motto.

The grievance is that in theCommittee report quality has gotthe centre stage instead ofParent’s grievances regardingunreasonable fees andprescribing norms for fees.

No norms can be devisedwithout reference to their impacton quality of education. Forprovided quality educationunaided schools will needresources (which theGovernment cannot be expectedto provide.)There is also nocompulsion for students to optfor unaided schools.

The Governments GRconstituting this Committee is tobe read harmoniously with thelaw of the land as decided bythe 11 judges ConstitutionalBench in TMA Pai case.

The allegation is baseless. DrJain’s submissions have beenreproduced in toto in theCommittee Report.

6 I reject the said draft report in totalityand do not agree /Consent with most of thecomponents / suggestion made inthe said report and therefore Idisown my self from the said reportdue to the facts mentioned below.

a) The said draft report isincomplete, distorted andfalse.

b) Many of the components /suggestions /recommendations have neverbeen discussed in ourcommittee meetings.

c) The statements /

The hon’ble member’s dissent isnoted. Serially, the Committee’sview are as follows:

a) to c) not accepted

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recommendations /suggestions of parents aredistorted and incomplete asonly parts of our suggestions(favorable to management)have been mentioned in thereport.

d) 90% of the suggestion /recommendations made byparents are missing in theDraft Report.

e) The report has been preparedwith a view to grant autonomyto school management to hiketheir fees and it also givethem the loopholes / authorityto collect / demand / chargefee under various heads.

f) The report mainly deals withthe TMA Pai Judgment ofSupreme Court. All favorableparagraphs have been quotedrepeatedly. There isduplication of the most of theparagraphs of Supreme CourtJudgment which are favorableto management. Whereasthose favoring parents havebeen excluded completely.

g) The report gives a clearindication that the TMA PaiJudgment is Supreme andtherefore the State laws, Acts,SS code etc. have no value,hence should be thrown in thedustbin. If this is the casethen the Committee shouldhave prepared one line reportstating that as per the

d) The Report of Sub group II inwhich parents representativessuggestions/ recommendationswere compiled, is included inPart II of the Committee’s report.It was not incumbent on theCommittee to accept allrecommendation of theSubgroups. In discussions avariety of views emerge. Thegreatest area of agreement iscarved out to represent theCommittee’s view.

e) Not true

f) This is incorrect. Thejudgment has been quoted forgranting autonomy to unaidedschools in fixing their fees aswell as for curbing profiteeringand commercialization ofeducation.

g) This is an unfairrepresentation of theCommittee’s view. TheCommittee has takenunbiased view that isconsistent with the decisionof the 11 judge bench of theSupreme Court to curbcommercialization andprofiteering from education

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Supreme Court Judgment ofTMA Pai the Schools haveautonomy to fix their own feesand admit the students.

h) The Recommendations madeby sub-group II are almostmissing in the report andeven if included, they are inincomplete and distortedform. Whereas the suggestionof sub-group I (where therewas no parentsrepresentative) were taken intotality (100%).

i) I have raised many objectionsin various meetings but all myobjections were eitherunheard or not recorded atall, each time I have to protestand get my recommendations/ suggestions included /recorded in the minutes butnone of thoserecommendations /suggestions / submissionshave been reproduced in thedraft report.

j) Regarding Suggestive Normssubmitted by Sub-Group I, Iraised objections againstmost of the components /suggestion of subgroup I buteven after justifying the same,those suggestive norms havebeen reproduced in totality inthe draft report.

k) Most of the items ofSuggestive Norms are eitherparts of term fees or of capitalexpenditure many items ofthe suggestive norms are thebasic requirement of Schooleducation and hence should

on the one hand and to leaveunaided schools free to fixtheir fees.

h) The Report of Sub group II inwhich parentsrepresentatives suggestions/recommendations werecompiled, is included in PartII of the Committee’s report.It was not incumbent on theCommittee to accept allrecommendation of theSubgroups. In discussions avariety of views emerge.The greatest area ofagreement is carved out torepresent the Committee’sview.

i) All members were requestedat the end of each meeting tofurnish their submissions inwriting. Accordingly DrJain’s suggestions wereincorporated in full in the finalminutes which form a part ofthe Report. If the Committeefound many of hissuggestions unacceptable,the position must beaccepted.

j) The objection raised werediscussed and a view taken.

k) There are two views in thematter. The Committee wentby the majority view. Thefunds are invested by theTrust/Management of theSchool. When these assetsare used for the purpose of

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not be charged separately. Ihave always objected, in ourcommittee Meetings, that allitems of capital investmentslike library resources, Labequipments, Computers &Accessories, Xerox machine,Audio visual equipments,hardware & Software, LCD’sCD’s, sport equipments Lights& sounds equipments, indoor& outdoor play equipments,water coolers, Lab safetyequipments, Furniture &fixture, Cafeteria equipment,Canteen Equipments,Infrastructure costs,maintenance costs, DVD’s,CD’s, DVD players cameras,pen drives, portable Handover, PA systems videoconference equipments,security alarms, CCTVCameras, Tea/Coffee vendingmachines etc. are ofinfrastructure cost and henceshould not be collected fromthe parents / students. Thereare clear guidelines about thesame as the infrastructurecost of equipments / facilitiesshould not be collected fromstudents / parents. It is theresponsibility of themanagement to provide allrequired infrastructure.Therefore the above itemsand all other items ofsuggestive list of sub-group Ishould not be consideredwhile fixing fees but the samehave been convenientlyreproduced.

l) As stated above & during ourCommittee meetings thatmost of the items ofsuggestive norms proposedby subgroup I are part of termfees and also part of schooleducation, for which thetuition fees / term fees are

education of students, it isnecessary to recover thedepreciation of variousassets and incur revenueexpenditure for maintainingsuch assets in goodcondition. The Committee’sview is that the GeneralAccepted AccountingPrinciples should apply to allsuch items. Their illustrativelisting in Appendix does notvitiate such application ofaccounting principles.

I)No item can be charged twicefor the purposes of fees.

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collected. Therefore how theschools can chargeseparately for the sameactivities?

m) The suggestive norms arenothing but a legal way toexploit the parents / children.

n) Many items in the list of FixedAssets have not beenmentioned but they are part ofdepreciation. How can youprovide depreciation onassets which are not shown inthe list of assets? Theseitems are Air Conditioners,Toys, Gymnasium Goods,Sewing Machines, Lift,Biometric machines, MotorVehicles etc.

o) Most of the School buildingsbelong to a particular Trust &the Schools pay rent to thetrust therefore how theschools can avail of thedepreciation on building?

p) Further, when the building isthe properly of trust, therepairs & maintenance is theresponsibility of the trust /owner, therefore how theschool can demand repair &maintenance charges?

q) Most of the schools get land,water and electricity atsubsidized rates from theGovt. then how they can becategorized as unaidedschools. They are gettingindirect aid from the Govt.

m) Not true

n) Accounting principles cannotbe altered by this Committee.Depreciation will have to becharged on all assets acquiredby the school. Since these arestandard accounting practices,no mention need be made ofthese by the Committee.

o) When the school building isowned by an entity other thanthe school, the Depreciationcannot be claimed by theschool. However, when the titleof the building is with the school,it will be entitled to itsdepreciation.

p) This will depend on thenature of agreement betweenthe school and the landlord.Repairs of routine nature,generally termed as ‘currentrepairs’ shall have to be carriedout by the tenant school.

q) Indirect subsidies of generalnature cannot convert anunaided school to aided school.If the same tariff ( for electricityor water) applies to all‘educational’ institutions as acategory, it is deemed to bereasonable classification and notsubsidy to any individualinstitution. Similarly MIDC offersplots at less than commercialrate, to all school which take upsuch plots in their area to assist

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r) The amount of depreciationand other expenses incurredtowards optional activities /subjects should only becollected from the studentswho opt for optional subjectsand a separate accountshould be kept for the samebut there is no mention aboutthe same.

s) Further it has been clearlydiscussed & decided in themeeting that there will be abasic syllabus for which thetuition fees will be same for allstudents, At the same timesthe schools can offer optionalsubjects, the students willhave the choice to select / optfor particular subject/s andaccordingly they can pay theadditional amount of fees forthe optional subject/s.However the optional subjectsshould not be mandatory forall and should be taught afterschool hours only. But thereis no mention about the samein the Draft Report. Thereforeconsidering the above facts, Ihave no option but todisagree totally with the saidDraft report which is onesided, incomplete & distorted.

industry. This cannot convertthem into aided school.Besides, determination ofcriteria for unaided category isnot within the purview of thisCommittee.

r) While there is some merit inthis contention, it will not bepossible to cover such variationsby any general formula withoutmaking accounting undulycomplicated. The Committeeconsiders that activity relateddirectly to curriculum should befor all students. Extra- curricularactivities where unduly heavyexpenditure is involved would beoptional and charged only to thebeneficiaries.

s) This concept of basicsyllabus was not foundacceptable because of theprevailing diversity of Boards.

7 I strongly protest against the saidDraft Report and also making itvery clear that under nocircumstances this report besubmitted to the government.The suggestions /

7 The Committee has noted theviews and found the greatestarea of agreement in the Reportpresented.

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recommendations made byparents in various CommitteeMeetings and Sub-Committee IImeetings should be incorporated.

Therefore I request your goodself to kindly prepare a freshreport after making requiredmodifications / changes /alterations etc. by incorporating /including all recommendationsand suggestions of parents andparticularly those suggested byme, not later than the nextmeeting i.e. before 10th October,2009 so that the same can befinalized in the next meetingscheduled on 10th October, 2009.I propose that the report may beprepared in 5 parts i.e.1. General Introduction withcomments on why the committeewas appointed, its purpose etc.

2. Terms of References

3. Issues where there wereconsensus between parents &the management

4. Suggestions from SchoolManagement

5. Suggestions from Parentsrepresentatives.

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Chapter 6: Dissent Note of Dr A Kulkarni & Committee’s comments

S. No Gist of point made by Dr AvishaKulkarni

Views of the Committee

1 Since the committee was dominatedby representatives of managements Iam not surprised that the draft reportalso heavily leans in their favour.

The judgment of the Supreme Court inthe TMA Pai case is being selectivelyused to back the managements’stance. The draft overlooks the factthat the SC in this very case andseveral other cases has made it clearthat education cannot be a businessand in any case profiteering shouldnot be permitted under anycircumstance.

It was precisely keeping in mind thespirit of these judgments and its aim ofproviding affordable education that thestate government issued a GR on May27, 2003. Hence any move to dilutethe provisions of the Maharashtra anti-capitation fee act and other relevantlaws and GRs should not besupported by our committee.

This is an unfair representationof the Committee’s view. TheCommittee has taken unbiasedview that is consistent with thedecision of the 11 judge benchof the Supreme Court to curbcommercialization andprofiteering from education onthe one hand and to leaveunaided schools free to fix theirfees.

This is incorrect. The judgmenthas been quoted for recognizingthe right of unaided schools tofix their fees, as well as forcurbing profiteering andcommercialization of education.

The Supreme Court judgmentrequires Governments to reworkany regulation/enactment thatlays down the fee structure. TheCommittee cannot ignore this.

2 I also strongly object to theobservation that aided schools, whichform 90 per cent of the schools inMaharashtra, cannot be blamed forthe poor quality of education providedby them. We should recognize thefact that high levels of corruption inthe education department and the lackof a comprehensive and sustainedpolicy to upgrade the infrastructure inthese schools and upscale the skills ofthe teachers have resulted in thepresent situation. Initiatives taken by

The hon’ble member makesserious allegations against theGovernment. The Committeedissociates with the view.

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committed persons in the field ofeducation have indeed resulted indramatic improvement in the teachingquality of certain schools.

Also, it will be wrong to presume non-aided schools provide vastly superiorquality of education. Some of thememploy poorly qualified staff and getaway with it because of lack ofsupervision by their respective boardswhich are based in New Delhi.

And if there is rampantcommercialization of education bythese non-aided schools it is becauseof failure of the government machineryto take firm and timely action.

In general, the perception is thatthe unaided schools have betterquality that attracts students tothem.

The Committee recommendsmeasures to curbcommercialization andprofiteering

3 I had articulated these views duringthe various meetings of our committeebut were turned down mostly on theground that the majority does notagree with them. But given the verycomposition of the committee I am notsurprised that the majority, comprisingof representatives of managements,rejected by suggestions. I feel that thecommittee’s commitment should havebeen to ensure that education is notconverted into a business.Unfortunately, that has not happened.

I also wish to reiterate my objection tothe manner in which my comments atthe meetings were leaked to outsidersand that too in a distorted form. Theminutes of the committee were alsosent to high authorities even beforethey were confirmed by the membersand even before the report is ready.

The comments are unjustified

It had been clarified to thehon’ble member that it was theState Government which hadfurnished the Committeeminutes to the Court along withits Affidavit.

4 As per the GR of 2003 if the PTA isconvinced that an institution isindulging in profiteering then it cancomplain to the Dy. Director ofeducation who in turn conduct anaudit and frame a new fee structurewhich roots out profiteering. Thiscrucial provision, which is in completeconsonance with SC judgments in

The Committee consideredvarious options before makingits recommendations on redressmechanism.

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TMA Pai and other cases, should notbe done away with under anycircumstances.

5 As per the GR within 30 days schoolshould have democratically elected PTA, if school fails to do that, withoutany valid reason, heavy penalty ( 10or 15 % of revenue, whichmanagements are asking as surplusamount ) should be imposed . PTAbody is must as this is the bodyauthorized to monitor that there is nocommercialization of education.

A 15- day extension can be grantedand if the PTA is still not formed thena notice for withdrawal of NOCgranted by the government to start theschool should be served on themanagement.

The Committee’srecommendations in Para 27cover this adequately.

6 If the school has got land or any otherfacilities from the govt or municipalcorporation then it can not be calledunaided and govt has right to controlas supported by the Supreme Courtjudgment Union of India / Jain Sabha.

I had recommended a reasonablesurplus of ten per cent but the majoritysaid it should be 15%. If the majorityrecommendation is accepted then mysuggestion in the above paragraphregarding government land etc shouldbe taken into consideration.

Indirect subsidies of generalnature cannot convert anunaided school to aided school.If Government /MIDC offersplots at less than commercialrate, to all schools in a givenarea as a policy, this cannotconvert them into aided school.Besides, determination ofcriteria for unaided category isnot within the purview of thisCommittee.

7. Also, the accounts of the schoolshould be given to the PTA regularlywhether there is a proposal for a feehike or not. Ideally they should beuploaded on the school’s website.This will ensure transparency.

Any proposal for increase should beintimated to the parents latest bySeptember as the admissions for thenext academic year close by October.This will give fair chance to parents toeither accept the hike or move out toaffordable schools. This without

The Committee consideredvarious alternatives and havemade recommendations onsimilar lines in Para 31.

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prejudice of the PTA’s right toconsider the fee hike proposal andcomplain to the education dept. ifit suspects profiteering.

8 To eliminate or reduce thediscrimination in the education systemit was my suggestion to havea uniform board and all managementsof different boards should cometogether to achieve this goal in thebest interest of the children who arethe future of our nation. Though theidea was in no time rejected in thisreport now it is stated that each schoolmanagement under same boardshould have freedom to decide theircurriculum and fees will be chargedaccording to their curriculum. This isa dangerous recommendation and willgive the managements the freedomwhat they want. My suggestion wasthat till we achieve one nation oneboard system at least each boardshould have fix the curriculum forwhich their should be fix fees and onlyas per additional facilities (e.g aircondition, etc) the school can chargeextra.

More importantly NO Legal feeexpenses should be permitted if thecase is being fought against parents/students. I reserve the right to add points,which may have been left out,before the final meeting takesplace.

Enforcement of a rigid uniformityin curriculum was notconsidered desirable.

This can cut both ways. It canencourage parents to resort tolitigation. A final view on this willhave to be taken by theGovernment.

Yes, of course.

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Part –II

1.Government G.Rs2.Minutes of the seven Meetings3 Reports of the Two Sub Groups

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Part –III

Other Correspondence ofthe Committee